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EXHIBIT 99.5
FORM OF ADDENDUM TO STOCK OPTION AGREEMENT
LIMITED STOCK APPRECIATION RIGHT
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ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are hereby
made a part of, that certain Stock Option Agreement dated 2~ (the "Option
Agreement") by and between Legacy Software, Inc. (the "Corporation") and 1~
("Optionee") evidencing the stock option granted on such date to Optionee under
the terms of the Corporation's 1995 Stock Option/Stock Issuance Plan, and such
provisions shall be effective immediately. All capitalized terms in this
Addendum, to the extent not otherwise defined herein, shall have the meanings
assigned to them in the Option Agreement.
LIMITED STOCK APPRECIATION RIGHT
1. Optionee is hereby granted a limited stock appreciation right in
tandem with the option, exercisable upon the terms set forth below:
(i) Should a Hostile Take-Over occur at any time after the option
has been outstanding for a period of at least six (6) months measured from
the Effective Date of this Addendum indicated below, then Optionee shall
have the unconditional right (exercisable during the thirty (30)-day period
following such Hostile Take-Over) to surrender the option to the
Corporation, to the extent the option is at the time exercisable for vested
shares of Common Stock. In return for the surrendered option, Optionee
shall receive a cash distribution from the Corporation in an amount equal
to the excess of (A) the Take-Over Price of the shares of Common Stock
which are at the time vested under the surrendered option (or surrendered
portion) over (B) the aggregate Exercise Price payable for such shares.
(ii) To exercise this limited stock appreciation right, Optionee
must, during the applicable thirty (30)-day exercise period, provide the
Corporation with written notice of the option surrender in which there is
specified the number of Option Shares as to which the option is being
surrendered. Such notice must be accompanied by the return of Optionee's
copy of the Option Agreement, together with any written amendments to such
Agreement. The cash distribution shall be paid to Optionee within five (5)
days following such delivery date, and neither the approval of the Plan
Administrator nor the consent of the Board shall be required in connection
with such option surrender and cash distribution. Upon receipt of such cash
distribution, the option shall be cancelled with respect to the Option
Shares for which the option has been surrendered, and Optionee shall cease
to have any further right to acquire those Option Shares under the Option
Agreement. The option shall, however, remain outstanding and exercisable
for the balance of the Option Shares (if any) in accordance with the terms
of the Option
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Agreement, and the Corporation shall issue a new stock option agreement
(substantially in the same form of the surrendered Option Agreement) for
those remaining Option Shares.
(iii) In no event may this limited stock appreciation right be
exercised when there is not a positive spread between the Fair Market Value
of the Option Shares and the aggregate Exercise Price payable for such
shares. This limited stock appreciation right shall in all events terminate
upon the expiration or sooner termination of the option term and may not be
assigned or transferred by Optionee.
2. For purposes of this Addendum, the following definitions shall be in
effect:
(i) A HOSTILE TAKE-OVER shall be deemed to occur in the event (A)
any person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or is
under common control with, the Corporation) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended) of securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or exchange
offer made directly to the Corporation's stockholders which the Board
does not recommend such stockholders to accept, AND (B) more than fifty
percent (50%) of the securities so acquired in such tender or exchange
offer are accepted from holders other than the officers and directors
of the Corporation subject to the short-swing profit restrictions of
Section 16 of the Securities Exchange Act of 1934, as amended.
(ii) The TAKE-OVER PRICE per share shall be deemed to be equal to
the greater of (A) the Fair Market Value per Option Share on the option
surrender date or (B) the highest reported price per share of Common
Stock paid by the tender offeror in effecting the Hostile Take-Over.
However, if the surrendered option is designated as an Incentive Option
in the Grant Notice, then the Take-Over Price shall not exceed the
clause (A) price per share.
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IN WITNESS WHEREOF, Legacy Software, Inc. has caused this Addendum to
be executed by its duly-authorized officer, and Optionee has executed this
Addendum, all as of the Effective Date specified below.
LEGACY SOFTWARE, INC.
By:________________________
Title:_____________________
___________________________
1-, OPTIONEE
EFFECTIVE DATE:_______________, 199__
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